Dobson v. Hallowell

| Minn. | Apr 27, 1893

Dickinson, J.

This action is to recover against the defendants as makers of two promissory notes, each for the sum of $5,000, alleged to have been made by the defendants, partners, payable to the order of the defendant Snider, by him indorsed and negotiated, and of which the plaintiffs are alleged to have become the owners before maturity. A verified answer was interposed, purporting to put in issue the alleged partnership of the plaintiffs; admitting the partnership of the defendants; admitting the signing of the notes by the defendants, and the indorsed signature of Snider; but alleging that there was no consideration for the notes, and that they were never delivered or negotiated by the defendants or by their authority, and that the plaintiffs had notice of this. The ownership of the notes by the plaintiffs is also denied.

Upon affidavits the plaintiffs moved that the answer be stricken out as sham. The motion was granted. This is an appeal from the judgment.

It has come to be the rule in this state, settled by numerous decisions of this court, that even a verified answer may be stricken out as sham when its falsity is so clearly shown that it is apparent that the alleged defense is a mere pretense, and not made in good faith. An examination of this case, as presented on the motion, satisfies us that it falls within the conditions above indicated, and that the court was right in its decision of the motion.

As to the alleged partnership of the plaintiffs, it is enough to say that, if the answer raised an issue as to the fact, it was wholly immaterial.

The affidavits on the part of the plaintiffs set forth, at considerable length and with particularity, facts bearing upon the alleged defense that the notes were without consideration, and were never delivered or negotiated by tbe defendants, or by their authority. We shall not here refer particularly to the facts so stated. It may be said in brief that it appears from these affidavits that, some two months before the commencement of this action, the plaintiffs’ attorneys, having received the notes for collection, presented them personally to both the defendants for payment; that the latter declared their inability to pay them at that time, because of financial embarrassments, which tempoiarily disabled them from meeting these and other obligations, but stated that negotiations were pending which they expected would soon enable them to pay the notes. It is shown that they admitted their liability on the notes, and promised to pay them, and that although there were continued negotiations upon the subject, in the course of which the defendants offered certain property in payment, they did not intimate that they had any defense to the notes.

Such a showing of the admissions and conduct of the defendants themselves, so inconsistent with the truthfulness of the defense shortly afterwards interposed to the action, called for some reasonable explanation on their part, in opposition to tbe motion. Van Loon v. Griffin, 34 Minn. 444, (26 N. W. Rep. 601.) The facts thus shown, of the defendants’ recognition and admission of the validity of the notes, were not denied by opposing affidavits, and the only explanation offered was in an affidavit by the defendant Snider, to the effect that he was not certain what notes these were token they were presented to him; that he had not then consulted his attorneys, and was not advised as to his legal rights, and did not know that said notes were, as he afterwards learned, a part of a large number of notes which had been issued without the authority of the defendants, and without any consideration. This does not fairly meet the case. The defendants presumably had some knowledge of the circumstances under which notes to the amount of $10,000, admitted to have been signed by them, had passed out of their hands; and having, during continued negotiations for their payment, admitted their validity and their own liability, it was incumbent on them, when the good faith of their answer, inconsistent with their admissions and conduct, was properly called in question, (as it was by this motion,) to offer some real explanation of the matter, and not rest on the bare general averment, pleaded as a defense, and the bare uncircumstantial statement in the affidavit, seemingly evasive, that, when the notes were presented for payment, one of the defendants did not know that these notes were a part of a large number of notes which had been issued without authority and without consideration. In several particulars this affidavit obviously, and, as it would seem, studiously, evaded the facts to which the proof and explanation should have been directed; and the case of the plaintiffs, going to show that the defense had not been pleaded in good faith, remained substantially unopposed by denial or explanation. The court was justified under these circumstances in its conclusion that the defense was not real, but sham. We may disregard, as not materially affecting this result, the affidavit of Mr. Barringer, the counsel for the plaintiffs, in Philadelphia, and of Mr. Cross, one of the defendants' attorneys, presenting some conflict as to what occurred between those affiants.

As to the plaintiffs’ ownership of the notes, the plaintiffs’ case is not only entirely unopposed, but is supported by the defendants’ admissions already referred to; and, setting aside the defense as pleaded, as to the issuing of the notes and the want of consideration, it is immaterial whether the plaintiffs acquired them before or after maturity.

Judgment affirmed.

Vanderburgh, J., did not sit.

(Opinion published 54 N. W. Rep. 939.)